Question

the following information applies to the questions displayed below. ries, bax, and thomas invested $58,000, $74,000, and $82,000, respectively, in a partnership. during its first calendar year, the firm earned $37100. required: prepare the entry to close the firms income summary account as of its december 31 year - end and to allocate the $37100 net income under each of the following separate assumptions. 3. the partners agreed to share income and loss by providing annual salary allowances of $33,000 to ries, $28,000 to bax, and $40,000 to thomas; granting 10% interest on the partners beginning capital investments, and sharing the remainder equally. complete this question by entering your answers in the tabs below. prepare the entry to close the firms income summary account as of its december 31 year - end. view transaction list journal entry worksheet record the entry to close the income summary account assuming the partners have agreed to share income and loss by providing annual salary allowances of $33,000 to ries, $28,000 to bax, and $40,000 to thomas; granting 10% interest on the partners beginning capital investments; and sharing the

Explanation:

Step1: Calculate interest on capital

Ries' interest: $58000\times0.1 = 5800$
Bax's interest: $74000\times0.1=7400$
Thomas' interest: $82000\times0.1 = 8200$

Step2: Calculate total of salary and interest allowances

Total salary allowances: $33000 + 28000+40000=101000$
Total interest allowances: $5800 + 7400+8200 = 21400$
Total of salary and interest: $101000+21400 = 122400$

Step3: Calculate remainder of net - income

Remainder of net - income: $371100 - 122400=248700$

Step4: Allocate remainder equally

Each partner's share of remainder: $248700\div3 = 82900$

Step5: Calculate each partner's total share of net - income

Ries' share: $33000+5800 + 82900=121700$
Bax's share: $28000+7400+82900 = 118300$
Thomas' share: $40000+8200+82900 = 131100$

Step6: Journal entry

Date	General Journal	Debit	Credit
	Ries, Capital		121700
	Bax, Capital		118300
	Thomas, Capital		131100

Answer:

Date	General Journal	Debit	Credit
	Ries, Capital		121700
	Bax, Capital		118300
	Thomas, Capital		131100